Which of the following is typically NOT a requirement for REITs?

The requirement that a Real Estate Investment Trust (REIT) must invest exclusively in commercial real estate is typically not accurate. While many REITs do focus on commercial properties, they can also invest in a variety of real estate sectors, including residential, industrial, and even healthcare facilities. The flexibility in the type of real estate investments allows REITs to diversify their portfolios and adapt to changing market conditions.

The requirements for REITs often include the necessity to have a diversified investor base to promote broad investment participation, the obligation to distribute a significant portion of profits back to investors (usually at least 90% of taxable income), and the stipulation of maintaining at least 75% of their assets in real estate assets. These regulations enhance investor confidence and ensure that REITs contribute to the market's liquidity by returning profits to shareholders rather than retaining them.